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Docs To Candidates: Your Ideas For Slashing Drug Prices Won't Work

This article is more than 8 years old.

The top Democratic presidential candidates will be heading to the debate stage tonight, and the problem of sky-high drug prices could very well end up on the agenda. Thanks to Martin Shkreli—the Turing Pharmaceuticals CEO who recently raised the ire of Hillary Clinton by jacking up the price of a rare-disease treatment from $13.50 to $750—the democrats have been throwing around a lot of ideas about what should be done to slash prescription drug prices. The proposals, most notably from Clinton and her top opponent, Bernie Sanders, include allowing Medicare to negotiate drug prices, banning deals that delay cheap generics and making it easy for patients to buy prescription drugs overseas.

I was curious what doctors thought about these proposals, so I asked Sermo—a social network for physicians—to poll its members on the eight top solutions to high drug prices proposed by Clinton, Sanders and others. The message from the nearly 1,600 docs who responded is clear: None of the proposals will be sure-fire solutions to high drug prices, they say. Only a free market, sans insurance coverage, would truly discourage folks like Shkreli from playing fast and loose with drug prices.

First, a deeper look at the proposals is in order. Clinton is the candidate who has been most vocal about drug prices lately, laying out a plan on September 22 and releasing a TV spot that specifically calls out Shkreli for causing “skyrocketing” out-of-pocket drug costs. “Nobody in America should have to choose between buying a medicine they need and paying their rent,” she said in the TV ad. (See video below.) In addition to allowing Medicare to negotiate prices, Clinton is proposing that low-income enrollees in the government program get the same rebates offered to Medicaid members. She would also require health insurers to cap out-of-pocket drug expenses at $250 a month, mirroring a policy that already exists in some states, including California.

Another key element of Clinton’s plan is that she is vowing to eliminate so called pay-for-delay agreements between makers of brand-name drugs and generics manufacturers—deals that often keep cheap rivals off the market well beyond the exclusivity period specified in their patents. Sanders is also in favor of that idea, which he proposed September 1 in draft legislation aimed at bringing down drug prices. Sanders, too, is in favor of Medicare negotiating drug prices, and he has proposed that Congress “uncouple research and development costs from drug prices by rewarding innovation with a prize,” according to a press release.

Eliminating pay-for-delay practices is the most popular proposal so far, according to Sermo’s poll. That said, it only got 56% of the votes. Freeing up Medicare to negotiate prices came in second, with 53%, and allowing patients to shop overseas for drugs was a distant third, at 33%. About a quarter of respondents said drug companies should have to disclose their R&D costs and that they should no longer get tax deductions for marketing expenses. (See graphic below.)

But many Sermo members griped that their top choice for holding down drug prices wasn’t even on the list. As one family physician put it: “Establish a free market—we haven't had one for nearly a hundred years—and prices will fall , supplies will be ample and the quality will remain high. That applies to medications, physicians' fees, everything."

Another family-medicine practitioner suggested that drug prices have skyrocketed because of all the mergers and acquisitions that have taken place in Big Pharma, creating a sort-of monopoly in some categories. “They can then charge whatever they like for these meds. If it's not the responsibility of the FDA, then surely the FTC should be stepping in to protect the public from price gouging,” the doctor suggested. “This is not free-market level-field competition but a cornering of the market on certain drugs for which there is no comparable equivalent.”

One doctor reported that even generic drugs are becoming too pricey for many patients—and that all companies should be forced to disclose more about how they determine what to charge for their products. “My patients tell me this every single day. Pharmaceutical companies have no oversight ….We need pricing transparency and they need more oversight in setting their medication charges.”

One OBGYN proposes eliminating all third-party insurance coverage. “When people actually pay for medical care and drugs, the costs of everything will come down,” the doctor says. Another concurs, but also admits that to pull it off, the entire regulatory system would need to be overhauled. “And the barriers for generic manufacturers need to be removed so that there will be honest competition.”

One pediatrician suggests the problem is too multi-dimensional to demonize just the drug companies. Some of the R&D costs consist of fees that pharma companies must pay to clinical trial investigators, the respondent says. “So it is a lot of ‘little’ things that go into the pricing of meds besides greed (which I admit plays a large role). It is a very complex issue that cannot and will not be helped by the simple solutions.”

Of course, we’re unlikely to ever have a completely free market for health care in this country anyway. The insurance industry is too powerful an institution to simply be eliminated. And whether any of the candidates’ proposals would actually cause drug prices to drop is open to question. As for Turing, it announced on September 24 that it would be lowering the price of the disputed drug, Daraprim, and it was planning to meet with physician and payment groups to discuss cost issues.

It seems a little public shaming, Shkreli-style, may be the only effective way to drive down drug prices.

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